[2024] UKUT 00390 (TCC)

whether the penalty was properly calculated on the “deliberate” basis.

Mr Bedenham further contends that the FTT’s holding at paragraph 241 that “deliberate behaviour is not necessarily…dishonest” is (at least arguably) inconsistent with the Supreme Court’s decision in HMRC v Tooth [2021] UKSC 17 where, when considering the meaning of “deliberate inaccuracy” in s118(7) of the Taxes Management Act 1970, the Supreme Court stated at [47]:

“…for there to be a deliberate inaccuracy in a document within the meaning of section 118(7) there will have to be demonstrated an intention to mislead the Revenue on the part of the taxpayer as to the truth of the relevant statement or, perhaps, (although it need not be decided on this appeal) recklessness as to whether it would do so”

He relies on the Supreme Court’s definition of dishonesty: A person is dishonest if, on the facts as known or genuinely believed by him/her/them, his/her/their actions would be regarded as dishonest by an ordinary, reasonable and honest person (see Ivey v Genting Casinos [2017] UKSC 67 at [74]).

Mr Bedenham argues that it is, at the very least, arguable that a finding that someone has acted with “an intention to mislead the Revenue” per Tooth is a finding of dishonesty per Ivey (or, put another way, a conclusion that the Appellant’s behaviour was deliberate required a finding that the Appellant had behaved dishonestly) Therefore such a finding was not open to the FTT in circumstances where the same had not been advanced by HMRC (and none of the procedural safeguards required by allegations of dishonesty had been given).

He fairly accepted and drew to my attention to the direct authority against him which states that a deliberate inaccuracy does not require dishonesty: the Upper Tribunal’s decision in CF Booth Ltd v HMRC [2022] UKUT 217 (TCC) where the UT stated at [41]:

“There is in our judgment no requirement for HMRC to plead or prove dishonesty when seeking to impose a penalty for deliberate inaccuracy under Schedule 24 FA 2007. As the FTT held in Auxilium, deliberate inaccuracy occurs when a taxpayer knowingly provides HMRC with a document that contains an error with the intention that HMRC should rely upon it as an accurate document. We do not consider that anything said by the Supreme Court in Tooth calls that test into question.”

Nonetheless Mr Bedenham submits that the decision in CF Booth is wrong, it did not consider Ivey when considering Tooth and the point should be revisited by the UT. At the very least, that position is arguable.